What is CMP? Meaning, Importance & How to Use in Trading (2025)

This article covers the concept of Current Market Price (CMP) and its critical role in trade execution for Indian investors. We examine the technical distinction between CMP and Last Traded Price (LTP), explaining why they often differ in fast-moving markets like Bank Nifty. The guide explains how to use CMP effectively with limit and market orders, the impact of liquidity on the price you actually pay, and the upcoming changes to NSE’s F&O pre-open session starting December 8, 2025.

In the fast-paced world of the Indian stock market, seeing a price on your screen doesn’t always mean you’ll trade at that exact level. Whether you are a day trader in Nifty futures or a long-term investor buying HDFC Bank, understanding What is CMP? (Current Market Price) is the first step to smart execution. While it seems simple, the difference between the price you see (LTP) and the price you get (CMP) can significantly impact your profitability, especially during high volatility.

Understanding What is Current Market Price

Current Market Price (CMP) is the real-time price at which a security (stock, bond, or derivative) is tradable in the market at a specific moment. Unlike the closing price of the previous day, CMP is dynamic. It changes every millisecond during trading hours (9:15 AM to 3:30 PM on NSE/BSE) based on the flow of buy and sell orders.

Think of CMP as the “now” price. If you want to buy Reliance Industries shares immediately, the CMP is effectively the lowest price a seller is willing to accept (Best Ask). If you want to sell, it’s the highest price a buyer is willing to pay (Best Bid).

The Real-Time Mechanism

In a digital order matching system like NSE’s NEAT (National Exchange for Automated Trading), CMP is determined by supply and demand equilibrium.

• High Demand: If more people want to buy than sell, the CMP moves up.
• High Supply: If selling pressure dominates, the CMP moves down.

For liquid stocks like TCS or Infosys, the CMP updates thousands of times per minute. For illiquid stocks (like some small-cap SME stocks), the CMP might remain stagnant for minutes or hours until a new trade occurs.

Significance of Current Market Price

Why does CMP matter more than just being a number on a screen? It serves three critical functions for your portfolio:

1. Valuation Benchmark

CMP is the primary input for calculating the real-time value of your holdings.

• Example: If you hold 100 shares of Tata Motors bought at ₹900, and the CMP is now ₹950, your unrealized profit is ₹5,000. This “Mark-to-Market” (MTM) value helps you track net worth instantly.

2. Entry and Exit Precision

For traders, CMP dictates the cost of entry. In volatile instruments like Nifty 50 Options, a delay of few seconds in reacting to CMP can change your premium by 10-20%. Knowing the CMP allows you to decide whether to enter a trade now or wait for a pullback.

3. Liquidity Indicator

A stable CMP with narrow gaps between buy and sell quotes indicates high liquidity. A CMP that jumps erratically (e.g., from ₹100 to ₹105 without trades in between) signals low liquidity and higher risk.

Note: As per SEBI regulations, mutual fund NAVs are calculated end-of-day. However, for ETFs (Exchange Traded Funds) like NiftyBees, the CMP on the exchange allows you to buy/sell at real-time prices during market hours, unlike traditional mutual funds.

How to use Current Market Price in trading?

Using CMP effectively depends entirely on the type of order you place. Your broker (like PL Capital) gives you two main ways to interact with CMP:

Market Orders: Speed over Price

When you place a Market Order, you are telling the exchange, “Buy this stock immediately at whatever the CMP is.”

• Pros: Guaranteed execution (if liquidity exists).
• Cons: You might pay more than expected if the price jumps suddenly (Slippage).
• Use Case: Emergency exits or high-momentum breakouts where getting into the trade is more important than saving a few paise.

Limit Orders: Price over Speed

When you place a Limit Order, you set a specific price cap. “Buy this stock ONLY if CMP is ₹500 or lower.”

• Pros: You control the exact price you pay.
• Cons: No guarantee of execution. If CMP stays at ₹500.05, your order at ₹500 will not fill.
• Use Case: Buying dips or entering illiquid stocks where market orders are risky.

Upcoming Change: F&O Pre-Open Session

Important Update: As per NSE circular dated November 2025, a Pre-Open Session for the F&O segment will be introduced starting December 8, 2025. This session (9:00 AM to 9:15 AM) will allow traders to place orders to discover the opening price for futures contracts, reducing the volatility that typically happens at the 9:15 AM bell.

What is the difference between CMP and LTP?

This is the most common confusion among new investors. While often used interchangeably, they are technically different.

Real-World Example:
Imagine an illiquid stock. The last trade (LTP) was at ₹50. However, currently, no seller is willing to sell below ₹55. If you place a market order thinking the price is ₹50, you will actually buy at the CMP of ₹55, instantly paying 10% more. Always check the Market Depth (Best 5 Bids/Asks) to see the true CMP.

How to Find Current Market Price in the Stock Market?

Finding the CMP is straightforward with modern trading tools. Here is how you can track it:

1. Trading Terminals & Apps

On your PL Capital app or web terminal, the bold number flashing next to the stock symbol is typically the LTP. To see the true executable CMP:

• Click on the stock name.
• Open the Market Depth or Quote window.
• Look at the Best Ask (if you are buying) or Best Bid (if you are selling). This is your functional CMP.

2. Exchange Websites

Both NSE (nseindia.com) and BSE (bseindia.com) display real-time CMP (with a slight delay for non-members).

• Search for the stock symbol (e.g., “RELIANCE”).
• The page will show “Current Price” along with the day’s High, Low, and Volume.

3. Pre-Open Market (9:00 AM – 9:08 AM)

During the pre-open session, you cannot see a continuous CMP. Instead, orders are collected, and an equilibrium price is calculated. This equilibrium price becomes the opening CMP at 9:15 AM.

Important Note on Taxes: When you sell at the CMP and make a profit, remember the tax implications for FY 2025-26:

• STCG (Short Term): 20% on equity held < 12 months.
• LTCG (Long Term): 12.5% on equity held > 12 months (gains above ₹1.25 lakh exempt).

Conclusion

Mastering the concept of What is CMP? goes beyond knowing a definition; it’s about understanding market liquidity and execution. Whether you are placing a limit order to catch a dip or a market order to ride a breakout, the Current Market Price is your primary signal. Remember, in trading, the price you see (LTP) isn’t always the price you get—unless you pay attention to the Bid-Ask spread.

Ready to execute your strategy with precision? Open your PL Capital account today and get access to advanced trading tools that help you track and trade at the right CMP.

FAQs on Current Market Price

1. What is CMP and TP in share market?

CMP stands for Current Market Price, which is the real-time trading price of a stock. TP stands for Target Price, which is a future price level an analyst or trader expects the stock to reach based on valuation or technical analysis.

2. What is CMP in SIP?

In the context of SIP (Systematic Investment Plan), CMP refers to the Net Asset Value (NAV) of the mutual fund scheme. Unlike stocks, you cannot buy mutual funds at a live screen price; you get the end-of-day NAV based on cut-off timings (typically 3:00 PM).

3. What is the meaning of current price?

Current price means the price at which a security is trading at this exact moment. It is determined by the most recent match between a buyer and a seller. During market hours, it fluctuates constantly; after market hours, it refers to the closing price of the day.

4. How to calculate current market price?

You do not calculate CMP manually; the stock exchange (NSE/BSE) calculates it via an algorithm that matches the highest Bid (buy order) and lowest Ask (sell order). The price where these two meet and a trade executes becomes the Current Market Price.

5. Does CMP include taxes and brokerage?

No, the CMP displayed on your screen is purely the price of the share. When you buy, your total cost will be CMP + Brokerage + STT (0.1% on delivery) + Exchange Transaction Charges + GST. Always factor these in to calculate your break-even point.